US Stks Mixed; DJIA Lower, S&P 500 Reaches 18-Month High

DonnaKardos

(Updates with additional company information, beginning in the 10th paragraph.)

NEW YORK (MarketWatch) -- U.S. blue-chip stocks fell slightly Tuesday, with Travelers leading the declines after it received an analyst downgrade. However, the Standard & Poor's 500 index edged up to fresh 18-month highs, led by financials including Regions Financial and Bank of America as investors were encouraged by the minutes from a Federal Reserve meeting.

The Dow Jones Industrial Average slipped 3.56 points, or 0.03%, to 10969.99, marking just the sixth drop for the measure out of the past 27 sessions. Travelers was the measure's worst performer, off 74 cents, or 1.4%, to 52.59 after Sandler O'Neill downgraded its investment rating on the insurer to hold from buy.

Verizon Communications was also weak, down 26 cents, or 0.8%, to 31.20 after Chief Executive Ivan Seidenberg said he is concerned that a government proposal to increase broadband access could lead to regulatory "overreach."

The Dow's financial components kept its declines in check. Bank of America jumped 36 cents, or 2%, to 18.49 while J.P. Morgan Chase climbed 50 cents, or 1.1%, to 45.84.

The Nasdaq Composite rose 7.28, or 0.30%, to 2436.81, its highest close since Aug. 15, 2008.

The S&P 500 rose 2, or 0.17%, to 1189.44, its highest close since Sept. 26, 2008. The measure's telecommunications sector weighed, while its financial sector led the climb. Regions Financial was one of the best performers in the sector, up 36 cents, or 4.4%, to 8.55, after Credit Suisse analyst Craig Siegenthaler boosted his estimates and price target for the regional bank.

Tuesday's stock-market action came as the minutes of the Fed's March 16 policy-setting meeting, which were released with the normal lag, showed nearly all officials were in favor of maintaining a pledge to keep rates near zero for an "extended period," which usually means at least several more months.

"The Fed has tried to make it fairly clear that the first step in terms of reversing the quantitative easing they did is not to raise interest rates but to let their balance sheet run off and perhaps sell assets into the market," said Jim Meyer, Chief Investment Officer at Tower Bridge Advisors.

In turn, he said, "the investors feel we are entering the sweet spot of a very healthy recovery. You can see it in the persistence of the way stocks are going up in a non-flashy manner."

Massey Energy tumbled 6.24, or 11%, to 48.45 after the coal-mining company confirmed that 25 miners were killed in an explosion at its Upper Big Branch Mine in southern West Virginia. The company didn't say what might have caused the explosion at the mine. Shares of other coal companies climbed, including Alpha Natural Resources, which rose 1.30, or 2.5%, to 54.39; Arch Coal, which advanced 61 cents, or 2.5%, to 25.10, and Consol Energy, which gained 67 cents, or 1.5%, to 45.94.

CA Inc. (Nasdaq) slipped 45 cents, or 1.9%, to 23.40. The software maker announced plans to cut about 1,000 positions, or 7.6% of its work force, as part of a restructuring and consolidation plan and projected earnings for the year at the low end of its prior guidance.

Arrow Electronics declined 67 cents, or 2.2%, to 30.13. The electronics wholesaler said it is buying supply-chain company Converge, as well as Verical Inc., an e-commerce marketplace that deals in parts. Financial terms of the deals weren't disclosed.

El Paso Corp. edged up 18 cents, or 1.6%, to 11.66 after the U.S. Federal Energy Regulatory Commission approved its $3 billion Ruby pipeline, which will transport gas from the Rocky Mountain region to Western markets.

Credit Suisse downgraded its investment ratings on several homebuilder stocks, saying the coming expiration of the homebuyer tax credit is set to slow new-home orders starting in May. PulteGroup fell 28 cents, or 2.5%, to 11.16, and NVR Inc. declined 10.56, or 1.4%, to 727.44.

Valmont Industries dropped 3.22, or 3.7%, to 83.13. The maker of lighting, traffic and utility poles projected first-quarter revenue above analysts' expectations, although its outlook for sales and operating income were still significantly lower than prior-year figures.

Hertz Global jumped 1.06, or 9.8%, to 11.84 after Northcoast Research upgraded its investment rating on the stock to buy from neutral, saying commercial car rentals appear to be picking back up even faster than leisure, while the equipment rental business appears to be stabilizing.

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